Was asked three times pointblank whether the president believed that Climate Change is real and all times, he to client to answer the question. He said that the president made the decision purely on the base of economics and what was right United States economy. These are not contradictory things. The white house can answer that question, but at the same time say the president s decision was about this. The dodging a sort of remarkable in that sense, because it is not a difficult question to answer. That was the question followed about the epa administrators release, and the brought upn hearings some doubt on climate science. What is the opinion that the minister has to say about his own personal beliefs . Unbelief,ed about his and says he accepts that there is Global Warming that is happening, and that humans contribute to it. What he did say along with that is that it is difficult to measure, and cast doubt on the idea of doing something about it because of the improbability of knowing how much it is happening. Goes against the views of climate scientists, 97 , who say that Climate Change is happening and humans are contributing significantly to it. Pretty much consensus across the globe and in Major Political parties. The Republican Party is an outlier on this, not just in the country but in the entire industrialized world on the issue of climate science. Let me ask you about one of the final questions in the part of the press briefing there that was him by epa administrator. Someone asked him who would be at the bargaining table if the u. S. Was drawing going to try to go back and deal with a number of countries in europe, saying they would not go back to negotiating. What did mr. Pruitt have to say about that . He was a bit dismissive about the question, so he was asked about world leaders, including france and italy and germany having rejected the president of the call for renegotiating the climate deal. That is what the president said yesterday in the rose garden, he was calling for a better deal. Here, whensaid, asked about the rejection of that, he said well, that is up to them. So the white houses position is that they are willing to renegotiate, but there is not a lot of eagerness to renegotiate this. The paris pact is nonbinding. It does not force the United States to do anything specific. Come tores countries to the table and set their own Emissions Reductions targets, which the United States could theoretically change, but in the trump administration, it was sort of a symbolic move to pull out of that, and the trumpet ministration is saying we do not want to look at or consider this issue as part of our economic decisionmaking. X and i find it and i find it astonishing, to be prickly candid, who said this administration who said this decision was based on economics, but the issue of Climate Change never came up. It is a stark departure from what we heard during the previous ministration. Ask it is a huge departure from the previous ministration. No doubt, president obama made it very clear that he wanted Climate Change action to be a significant part of his president ial legacy. Now we see President Trump dismantling it. It was less of a dedication to this under the bush ministration, when there was more evidence coming out. Consensuscientific was really crystallizing, the Bush Administration did not quite excepted to the same accept it to the same degree as the rest of the civilized world. President trump has said in the past that Global Warming is a hoax, that it was created by u. S. Hinese to hurt economic growth, and other things that sound outlandish when you stack it up here. He spoke his campaign promise, it struck a cord in the heart of appalachia, kentucky, pennsylvania, which he won by significant margins, and they have been hit by the changed world, the shift to a cleaner energy. What we know about the timing for all of this . This decision happened yesterday and he is making good on a campaign promise. What do we know about why this happens now and where things go from here . The white house has been looking at this for a while. Ae present has been asked on regular basis and this decision eventually had to happen. I do not think there was a reason it had to happen yesterday, but this happens in a context where the president s legislative agenda is essentially stalled on capitol hill, the Health Care Bill passed the house but does not seem to be going anywhere fast in the senate. Earlier today, shudder richard burr, a senior senator on the republican side senator richard burr, a senior senator on the republican side, said it is unlikely that we will get a comer has ever public a comprehensive health your deal this year. And they do wants tax cuts, no bill is there right now, not moving despite what the president tried to indicate yesterday. It is not really happening. So this is happening at a time when the president is eager for a victory, and some say that it does require congressional approval. I want to look at this contrast that i saw this morning. President said in the rose garden that tax reform is proceeding, but they would not give a firm answer about when we will see a concrete white house proposal. You were very familiar with the congressional agenda, the congressional schedule. What is your sense of when congress is going to see something from the white house . We do not know that they are, david. What the white house is saying and interestingly enough, the senate and House Republicans wheelers are saying that they want to achieve some sort of consensus, agree on a concept before they move forward. If you have the house do something, it ends up being a complex process where people and you dor votes not know where it will end. So we have key players in the white house, house, and the senate on the republican side trying to hash out some global consensus. It is not happening. That theseindicates sessions are not moving to a place agreement, there are widespread disagreements and how the tax steps should be paid for, and there is general agreement, if not unanimous agreement, that they should be paid for, and it is compensated. It is difficult to raise revenue mean, some people will take the hit. And they have not shown a willingness to agree on certain things in that regard. We are heading into the weekend, a big week next week when it comes to the investigation and russias involvement in the u. S. President ial election. We are expecting it to take place in a closed session on thursday, june 8 with fired fbi director james comey. How large does that loom on the washington agenda next week . Huge. I think it will be the number one topic on the washington agenda next week. The anticipation of this hearing is pretty expensive. I think it is the most hotly anticipated teaser congressional testimony we will get since before clinton testified the Benghazi Committee as a candidate for president. That was last year. And so there will be Big Questions that democrats have specifically about what the president has changed. The comey suggested there is a lot of reporting out there citing sources close to comey, saying the president asked the former fbi director to swell to the investigation into michael flynn, the former National Security advisor. That is a pretty big deal. Some democrats say that means exception of justice area think you so much, joining us from washington dc. You can catch the press briefing from the white house on the bloomberg, just go to tv on the bloomberg to see all of our interviews. This is bloomberg. This is bloomberg markets, i am julia chatterley. Scarlet and i is scarlet fu. Scott pruitt and sean spicer desk i amed up a scarlet fu. Scott pruitt and sean spicer just wrapped up a press briefing moment ago. They are record levels after mixed jobs report, but i hate to use this word, maybe it report, it wass enough to show the economy is still growing but the fed does not need to be more aggressive. People did not change meaningfully their expectations, the fed is raising rates in june. We are down on the s p 500,. 31 , but the nasdaq continues to be the big winner. Up 9 10 of 1 , and just a reminder, even though the dow is joining the record party, so to speak, the dow is far and away the best performer of the year, outpacing the gains that seen in the s p and the dow. They are on the nasdaq by more than 10 . If you look at todays session, the movers from the s p 500 at a percentage basis am a two of the top four performers are stocks. Isting here is a broad trading at a record, is up 80 after the thiss forecast and or of healthe care equivalent. And this new medication, relatively new, which is used to treat dermatitis, the guggenheim saying its launch ramp weeks in week line nine, and delta out with its main numbers. Available,evenue per and see mileage up through per 3. 5 . That is what is going higher today. On the flipside, we have what is going on with oil today. Oil prices are lower, and energy is really the worst performing group in the s p 500 today. That is not stopping the upward march, julia. Thanks, julie. And now talking about the u. S. Jobs report, which showed a pullback in hiring in may. Payroll came in at 130,000 last month, and the Unemployment Rate year low, and up. Growth remains weigheds and economists in earlier on bloomberg. This is a week to m ak to mixed report. But where you would expect the labor target to be at this stage. They are to satisfied or underemployed in the u. S. Workforce. That is an amazing trend. There is some very, very good news in this labor report. Some weaker market numbers expected today, but it reflects and irk week via wages, think we are in for a 2. 2 percent kind of real economy Going Forward. For more insight, we are enjoined joined by the chief u. S. Economist for bloomberg. What is your opinion . Tepid and milquetoast it was not that great. This was really due to falling precipitation, which i suspect may have been a oneoff phenomenon. In may, you get those on fluctuations in participation due to the timing of memorial day as well as the onset, there are a lot of temporary hirings for the summer months. We know that the first evener was fairly weak, though it did get revise higher. Is this part of the First Quarter weakness we tend to see . Asked that is an interesting question. Going into this report, i tested whether or not there were residual seasonalitys, which is a term for all of this First Quarter growth weakness. I also try to see if this applied to payroll members, and i found this was not the case. Anytime we get a weaker q1 in the last 11 years, you always have a sharp ounce bounce back in q2. But this does not look like it is leading to that. And when we look at the hiring 6, 12over the last 3, months, it has been steadily decelerating. This is consistent with that trend. And your argument here is that at some point, wages pick up, and we will be seeing workers enticing being enticed to come in to the workforce. Not this one. Julia but the top moving average of the wage growth has actually started to decline, and that was the underemployment, which is pushing new year lows. The average t the moral of the story is maybe there still is some religion will slack. You can see the elevated rates and other signs that we are not really scraping the bottom of the barrel, so to speak, in terms of finding new workers. One Excellent Way of testing which way this turns. It is economy 101, supply and demand. When the supply rises, the price point changes. We are not seeing the change in the price point. This has been range bound for the better part of two years, so there is some indications that wage pressures are starting to move in a higher direction, but certainly not convincingly so. There is still more work to be done on the later markets. Thank you so much labor markets. Thank you so much. Julia green lights capital gm to anhorn compares single flavor of ice cream scoop. Needs to do to attract more customers. This is bloomberg. Scarlet this is bloomberg markets, im scarlet fu. Julia and i am julia chatterley. Lets turn to the and one of itsgm biggest shareholders. Cheers up 13 , but David Einhorn of Greenlight Capital has not been impressed by the move. Today, we were told why he thinks gms full potential has yet to be unlocked. I think that gm is strong in very many areas of its business, and it has made a number of very good Strategic Moves and positions it has held very well for the future. There are lots of areas in operating in automobile companies, from product design, to manufacturing, sales customer , support, so forth. But one area where gm is weak is in its capital structure. It is weak in finance, and has a Balance Sheet that is financially too conservative for the value that is being created in the operations to be unlocked. The company has a market cap of just about 50 billion, 20 billion of in cash, an undrawn revor another 13 billion or 14 billion, and then there is money offshore in places like china that is not even counted. Preserving for the downside there is so much money locked in cash preserving for the downside it leaves an inefficient capital , structure for the company and shareholders who have been rewarded their with the lowest pe multiple in the entire s p 500. They traded a huge discount even to forward, where forts pe multiple would be 30 , 40 higher. I think that something needs to so be done to unlock the value at gm. So if that is the diagnosis why has management not , addressed this . They are concerned about their stock price, they know there is a problem. The ceo has a team around her why have they not addressed it . I think there is caring about a stock price, and caring about the stock price. I could lose that last five pounds, but do a really want to change my diet and exercise to do that . While i would rather have five pounds less, i am not willing to do that. G. M. Similarly would prefer a higher stock price, but they are not really willing to do what it takes to make that happen. Is it possible that they are scarred from the experience of going bankrupt and having to come back into the marketplace . They are saying we need some money for a rainy day, and might they be right about that . Sure. Theyompany has said are forever grateful to the United States for bailing themselves out and preserving the company through the last recession, and the company has capitalized to make sure that that absolutely, positively never happens again. So i think there are several ways to get to that particular thing. One of them is you could decide you are fighting a last war and change the Balance Sheet to make it more conducive to the current business, the current current cost structure of the company, which is structurally improved, which would require much last much less liquidity in cash. Four you could use of the kind clever, and we made that or you could use kind of clever proposal, and we have one that allows the company to keep the cash, all of its rainy day money, have its preservation for any future downturn that comes the exact same way they have it right now, but would unlock the value at gm. Take us through that clever plan. It involves two classes of stock, essentially. Sure. What are those two classes . You have a stock right now, and as the owners of gm, you get dividends and all the other values of ownership. If you separate out the value of the dividends from the other values, you would unlock 30 to 50 increases in the value of the stock. Such a simple i it so to simplify it, there is a dividends share and the growth share. And each shareholder gets one of each . One of each. You have the same dividends and the same growth you are getting right now, but you could trade one of them or the other, and the result is that people are more interested in dividends get new buyers coming in for those dividends shares, and alternatively, if you are not interested in the dividend but the growth of the company, you would be able to buy the other share. Of the market were working properly share. If the market were working properly, you would be able to use both of the shares, but you say there is an upside there. Where is the battle . Think of it as an ice cream stand that sells manolo chocolate swirl manila chocolate swirl. Vanilla chocolate swirl. Some people like that, but imagine if you sold vanilla, chocolate, or swirl, and any combination. So they would buy the dividend shares. This would be new participants in the market that would come they would getk a 7 to 9 yield, and those interested in the stock going up, they would buy the Capital Appreciation stairs and trade of the same pe that you have right now. Adding the math would unlock the value. You took that math to mary barra and her team, and walked them through it. They did not embrace it. What are they missing . Why it with a not say that is a good idea . The truth of the matter is they not engaged in it. They have just fought what we have done from the very very beginning. Whati would say is this is we wanted from the beginning, a collaborative process to solve the Balance Sheet process at gm. What we have done is in addition to our plan, which is up for the Shareholder Meeting next week, we have nominated three directors. These directors bring in in or miss Capital Markets ring in enormousiss bring in Capital Markets. And mary barra is a great ceo, but this is one area she has not been shining in. An exclusiveas interview with David Einhorn, founder and president of Greenlight Capital. Ahead, still commodities closing. Gold rebounding today after the release of the latest jobs report. We have that and other metals. This is bloomberg. So we need tablets installed. With the menu app ready to roll. In 12 weeks. Yeah. The world of fast food is being changed by faster networks. Data, applications, customer experience. Which is why comcast business delivers Consistent Network Performance and speed across all your locations. Fast connections everywhere. Thats how you outmaneuver. So new touch screens. And biometrics. In 574 branches. All done by. Yesterday. Banks arent just undergoing a face lift. Theyre undergoing a transformation. A data fueled, security driven shift in applications and customer experience. Which is why comcast business delivers Consistent Network Performance and speed across all your locations. Hello, mr. Deets. Every Branch Running like headquarters. Thats how you outmaneuver. From bloomberg World Headquarters in the 10 manhattan, i am julia chatterley. Got any markets are closing in new york for the final time this week. Lets begin with some sparkle. Gold rebounding after the u. S. Economy added fewer jobs than expected last month. Some investors are questioning the caseews may weaken for the Federal Reserve to raise rates beyond june. Meanwhile, oil had its biggest weekly drop in a month after Government Data signaled that the global glut is lingering. All of this hit by comments from russias most powerful oil boss, bending kes extending production costs might not work out. His is one of the reasons why opec is actually facing so much pressure. This chart that you can see on the bloomberg, the blue bars show u. S. Production is now at the highest production levels we have seen since august 2016. You can see this steep climb since then. The white line shows the wti crude coming under pressure as output increases. U. S. Shell could fill the shortfall from opec production cuts by the middle of next year. Scarlet . Scarlet thanks, julia. That get back to the st. Petersburg International Economic forum, because earlier today we spoke with the ceo of total. We asked him about his decision President Trump decision to exit the paris climate. The tree has been ratified, and as i tweeted yesterday i wenot know if you saw that, are committed to the strategy. And then there is Global Warming. Why . Global warming is influencing the introduction of this in all markets. So, with the Global Warming issue we have the state, and plenty of the custom means that companies, we invest. When i invest in energy, i invest for 20 years. I make decisions that because of the regulations, but because of how i anticipate the market. I would prefer to see the world in the u. S. Staying and we want to negotiate is up to them. But Global Warming is there, and for me, our strategy, which is a mediumlong strategy, that will use globalitted to warming and our strategy. If you are committed, if ep is committed, exxon mobil, and so many other companies and other industries are committed, doesnt matter if the u. S. Is in or out . Exactly. You know, i am convinced that into the real put world and projects, we have these corporations, these commercial corporations because we invest. We do things with investment, it is mediumthat to longterm. It is my duty to do that. So the commitment, the pledges regulatorye, on the side, that could accelerate or decelerate some of the decisions. But basically, we find that in 20 years, the gas market will grow because the coal markets will decline, the oil market could be wherever because when you were it is not because they are in or out, but of the chance. And i was thinking that European Countries maybe would make too much nice with production. Here. Is the politics im not in politics, im in my own business. Me in company has thrown this way. I invest in my core business because i think the market will decline. On oil, im looking for lowcost because they will grow. Gas, i am investing because i know the gas market will grow. Solar begin to invest in because it is a fact that it is a large share of the market. And states cannot do anything without technologies. Will trumps decision reflects affect any of your Investment Choices in the United States . No, not at all. There is a chance that this could all disappear, the chance that the u. S. Is that the u. S. Shall gather pollution. The coal system has shifted from cold gas coal to gas. You cant stop that. Of course you cant. We make that decision, that economic decision. We are rational people, you know . To invest today in the u. S. In a new coal plant for 25 years, because we want to invest in coal, that would be a mistake. It is more competition for gas. So what i have decided is to invest 2 billion, and many thousands of jobs being created as well as it is because the gas the gases lowcost, low energy cost, low physical costs. This remains ever a momentum. So politics and economics at all, it needs to make sense in the long term. You are investing in technologies to reduce your carbon footprint, the Carbon Capture in storage, for example, that consumes 10 of your r b budget. How long do you think it will take before that technology is financially viable . That is a long term. Again, look to the paris treaty. What was very important there came from this point, as you and 40, 50 years this needs to outlast the century. But i am convinced that hydrocarbon, like oil and gas, will still be produced in 2050. If we are responsible as a company, we have to invest today in technologies to be able to tackle with neutrality. Andon capture, storage, finalization, because im convinced that we can find ways to make chemicals and chemistry. Years, weat in 10 will have a carbon tax. I think if i have to pay this much to own my own omissions, it is worth investing some of those millions of dollars. Scarlet speaking with Erik Schatzker in st. Petersburg. Lets get you a check of the headlines, the other headlines on bloomberg first world news with mark crumpton. Pruitt told reporters that the United States would not apologize from withdrawing from the paris clavichord. He also did not answer questions on whether or not President Trump believes Climate Change is real and a threat to the United States. Through it says the president s views on Climate Change were focused on what pruitt calls one singular issue. What are the paris court could be good or bad for the United States. Rex tillerson is downplaying the significance of the u. S. Pullout from the paris accord, taking a photo op with brazils visiting foreign minister. The secretary of state says that the United States will still cut heat trapping pollution. I think it is according to that we notice that we have a terrific record on this. That was done after the paris agreement. Cut heat trapping pollution. I think iti do not think we we will be changing this ongoing in the future. Former exxon a mobil ceo, had urged President Trump not to abandon the deal that was ultimately overruled. In kabul, several people were killed with several hundred angry afghans are tested about a wake of security in the aftermath of that deadly truck bombing last week. 500 people were wounded and 80 were killed in a Diplomatic Quarter that was assumed to be secure. Lease used tear gas to try and disperse the crowd. Authorities have released new Security Camera images of the manchester bombers last moments, hoping it will prompt someone to come forward with more information. Continuesigation after last weeks attack that killed 22 people at an Ariana Grande concert. Three men remain in custody on suspicion of terrorism charges in connection with the attack. Six others were released without being charged. Ariana grandes headlining a benefit concert in manchester on sunday called one love manchester. Willy says its networks air the concert, which will be carried by broadcasters around the world. Global news, 24 hours a day, powered by more than 2600 100nalists and analysts in 20 countries. I am mark crumpton, this is bloomberg. Julia . Julia coming up, scares of apple shares of apple are high today after the highly anticipated Worldwide DevelopersConference Starting on monday. We get a preview of what to expect. From new york, this is bloomberg. Julia this is bloomberg market, i am julia chatterley. I am scarlet fu. Lets get a look on some notable numbers right now with julia. We are focusing on retail with this consumer discretion. Sean evers here shares he are up 12. 5 after the Company Reported they Beat Estimates after sales declined less than estimated. Lululemon is also scaling back on its line for girls, closing some of the stores to keep the business online. On the flipside side, we have restoration hardware. That company cut forecasts given two months ago, calling on one analyst to say that the panies desk thes ys think companies in question. This is the secondbest performing group in the s p 500 this year. Then we have Consumer Confidence in blue and Consumer Spending in yellow, both of those have taken a turn down. An interestingr basis of the past few months with Consumer Discretionary stocks continuing to go up as other things have been trending lower. Thats turn from discretionary to stable to talk about what we will be eating this weekend, perhaps Pinnacle Foods and conagra brands, both falling. Reuters reporting that both were , but the talks are reporting to have ended, and conagra is not looking to reengage with Pinnacle Foods. And Buffalo Wild Wings is on a ruffled wild ride today. Shares were down after speculation about what might be said at a conference in which investors were speaking today, and there was some news that the ceo would be stepping down. Shares been spiked and are now higher by 4. 5 . To one of lets turn our favorite stocks. Apple and its Developers Conference begins on monday, and anticipation is growing about the 10th anniversary iphone, but the company is also facing a challenge of developing new hit products. Joining us from San Francisco with a preview of what to expect is alex webb. Alex, and to see you. Hardware, software, what can weeks x from this conference . We expect from this conference . Alex we can expect to see new operating systems for apple devices, think about mac os, ios, mobile devices, and watch over x for the watch watch rolex ox for the watch. See two new ipads as well. The big thing we will be waking that thee possibility amazon at a will also come out, and we will be ramping up our production phase. It is a probability that we will see that on monday, so that is a ring with which anticipation is really building. And certainly a response to the act oh. If they do unveil that, how quickly do or how long do investors and consumers have to wait for it gets to market . Is this something they can start ordering it in the next week or month . It may be possible to start ordering it, but the reason that they would, if they do, is because they will then give the tools to developers to build the outs, which will be used by the speaker, think about the ability to order pizza and that kind of thing. Those tools will begin to the developers on monday, or would and by the time the product actually launches, there is a whole range of out to can use straight out the gate. So many exciting things happening on bloomberg markets. Are we late to this party in terms of the home speaker . I get the network argument and keeping people within their system, but how do they catch up . Alex the way apple makes its money is different from the way amazon and google do. These are two companies being smart. Amazon and google get their money from services. Amazon, you pay for amazon prime and you order these things from amazon. Com. Google has google play and youtube, but also their search. People way of leading towards those products. Apple to believe makes its money on hardware, and it is trying to part up other services as of its business. What will be interesting to see is how the stock will be price. Are they looking how this will be priced . Are they looking to make a profit on the hardware, which will be more expensive than use ng products, and or use less profit on the hardware and use it as a gateway to Services Like itunes and other things through the app store, which will cap for many sales. I know have to ask we mentioned this is a software conference, but the apple iphone anniversary is coming up. To what extent do they start beating the drum on that to get people excited about what is coming in the fall . Chance. Nk it is a slim there is a slim chance we will see any iphone hardware itself. The thing we could see is some hints of what might come in the iphone through the software. They issued this update to ios, the metabolic rating system, and some things might be built into that, that are beyond the capabilities of the current generation of iphone. Times it is possible to infer what comes sometimes it is possible to infer what comes next. See. we will wait and alex webb joining us from our San Francisco bureau, and we will be looking at that more on wgc on monday, right here on bloomberg television. , how georgeing up roberts is helping to put forgotten americans back to work. From new york, this is bloomberg. Bloombergs is markets, i am julia chatterley along with scarlet fu. Scarlet as economists weigh the strength of the u. S. Labor market, there is a larger job narrative embeddedness budget proposal. It believe that the permit a believe that the government should help people who cant work while cutting benefits were those who cant or wont. Today, we are highlighting a ndation highlighted founded by john roberts in order to help former incarcerated americans and drug addicts actually get work. I sat down with the ceo to talk about her work. I think this is a good time to be doing this work because obviously the president has spoken about the forgotten theicans, and during campaign, a lot of people were very concerned. Some people were left out of the workforce and do not have a chance to move into the economy, and that is what our work is all about. Talk a little bit about the kind of work that is on offer here. These are more starter jobs, right . Yes, that is correct. These are a variety of Successful Companies that are delivering quality products and services to the market, whether it be electronic Waste Recycling or in some cases even manufacturing, landscaping, janitorial services, food services, all wide variety of different kinds of businesses. But what they are really about is taking all of the money they have made and investing it in building the skills of their employees. So once they are looking for a job at another company, they are really prepared for work. And that is something employers are looking for. Scarlet what are the skills that most of these workers are most proud of achieving, of learning . There is a mist of skilled mix of skills. A lot of these people have not really had the chance to work, because employers are reluctant to hire them. To bere really proud working, to be participating in the labor workforce in that workforce. Any of them are for the first time working in a legitimate job, so they are learning the basic skills, showing up on time, being a lower worker loyal worker, working with teammates, being dedicated to getting the job done during the day. And at many of these businesses, they are learning hard skills, so they may be in food service, to cook, to serve, manufacturing, to operate machinery. Scarlet what about the payee . We talk about the tight winter market pay . We talk about the tight labor market and how this is going to affect wage growth. These are about preparing people for that next step into the workforce, where they can work for another company. What i would say there is we really like to see and we are beginning to see with some employers is that they are investing some of their training dollars and thinking harder about how to manage their frontline workforce so that they do stay on the job and they have an opportunity to move on and move up. Roberts, the are in kkr, started read f, and remains chairman of the board. How does this fund use the . Weng in schools assess very carefully the talent that runs these organizations, to assess whether there is a good market niche for the entities. Whether they are well run and whether there is an opportunity for growth and impact. I think he has really brought to this work a keen focus on outcomes and results, and that is, in turn, what we have really focused on, including not only the financial return in this case, but also the social return. There is a return to society when people go to work. That is both in reduced cost for public support, they become sense thatand in the they become productive members of the community, really contributing to the prosperity of the country. Scarlet how do you measure that, exactly . Numbers ofat that how many people are employed, who is facing problems, and how long they stay in the workforce, what their wages are, and whether they are able to move on and up. One thing we do measure carefully is what we called the social return on investment, and what we have found is that for every dollar these companies spend, there are 2. 23 a value that is delivered to society. They are using Public Service is less, contribute in a taxpayers, and companies themselves are earning instead of just being totally supported by governments or philanthropy. So it is a good deal for all of us to invest in these firms. Scarlet that was my conversation with red f ceo carly javits. Javis. Carla lets take a look at the major indexes. Lets start with the dollar, julia. The dollar index coming down by. 3 , and that is pretty low. Julia the lowest it has been since november 4, so we have retraced all the november Inflation Gains we have seen since the election of donald trump. We might see the revisions to the prior month that has put downward pressure on the bonds market, and also the stocks going on in oil as well. Despite that scarlet no downward pressure in equities. The dow is high, the s p 500 gaining a good bit as well. This is bloomberg. Exit 3 00 in new york, 12 00 p. M. In San Francisco, 8 00 p. M. In london. Scarlet welcome to bloomberg markets. Really been bloomberg World Headquarters in new york over the next hour. Youre the top stories we are covering in the bloomberg and around the world. Celebrating a money merger, the coceo says Janice Henderson joins us to discuss their action for the billions of dollars of combined assets. Addedw the u. S. Economy 130,000 payrolls been made, what what about under underlying aspects of the report . Will bring the three charts you may have missed. We are one hour from the close of tradings, lets check in an markets with julie hyman. For allecords again three major averages, with support out there was tepid reaction, weve seen stocks rebuild an early gains through the day. Its enough to take them to new records. The dow in particular at an intraday record, headlight on that basis and a closing basis, now has been catching up. There were also the 2000, up matching gains in the nasdaq today, is still not really attained its record. Its interesting to note, we have seen a small cap outperformance really shrink. Where the u. S. And this is here and white. It has been waning after the big postelection search. Weve seen its outperformance really waiting here along with inflation expectations. Interesting trend to note here. Speaking of large caps, we have familiar leaders here. If you look at what is getting the most today on an index point basis, you have microsoft up, apple up, broadcom on this list, the companys Sales Forecast which cannot ahead of estimates. Through these are records with the exception of apple. Big caps, big tap cap tech continuing to lead gains. Outside of stocks weve watched rates in the wake of the jobs report, they have been pushing lower. The u. S. Dollar for example, seeing a pullback today in the wake of the jobs report. We also treasuries going lower in the wake of the jobs report. There you have it. Back to you for breaking news. Julia breaking news something are popular, spain Six Largest Bank said to be starting measures to boost liquidity, they plan to meet with the ecb next week, according to sources. Make a popular set to be considering seeking more central bank fund, number of options available there. A concern over their credit quality at the company. There said they are willing to put themselves for sale, looking to selloff assets as well. Theyve been hit by credit deterioration. , whats details on this going on here. Charles penny. Y can you tell us charles, what is going on here, in terms of this report, and what theyre going to be doing as far as talking with the European Central bank about next steps . Thats right. Bank of popular is a thats in terrible trouble. As you mentioned, they said they need to raise capital, either seek a sale or raise capital through shared sale. All theiroking at options. We are reporting to the governor meeting the ecb next week to discuss some options. Theerms of being able to banks businesses suffering because of this tremendous pressure that it is under. Theyre having a meeting with the ecb next week to explore options to help. Julia what changed in the last couple of days . Yesterday, the bank said it had a significant amount of nonperforming loans, but also has said that its looking to sell itself, reissue shares what has changed in the last couple of days that means they now simply have to go speak to the European Central bank . Think, has changed i peoples perceptions the big papi lars ability to repair itself, to seek a solution that will enable it to fix its problems. Its 37 billion euros nonperforming assets. Those are the legacy of its over lending, overexposure to the market before spains property crash. Still probably the last, one of the last dish biggest of the spanish banks, with these over from theleft property boom and bust here in spain. Perception that their options are running out, that time is running out. What are some of the options they are we know that they have said that there is feasible. Julia i guess we should make the point here, we do not know to what degree did they liquidity concerns, how in depth those are at this moment. We also read in the last couple of days, the reports that the single resolution mechanism, the body that winds up distressed banks, they cant be saved, give them some kind of warning. The single resolution mechanism the board refused that suggestion as well. Its a most like rumors surrounding this bank have perhaps created intensity just in the last 24 hours. Am sure thats right. Im sure that report that you referred to as concentrated peoples minds, the months of bondholders, holders anyone debt. Yes. Selloff in bank stock today. People are nervous about Holding Shares in bank of popular going into the weekend. Julia think you so much for your insight on this. Scarlet. Scarlet thank you, julia. Merge jan anderson New York Stock Exchange this morning, the formation of this global asset manager with more than 330 ilion dollars in assets comes amid rising costs of do compliance with new technology and competition for lower fees. Including vanguard. Here in studio to discuss this, janet hendersons coceos and your for mica, and take well. Thanks for joining the gentleman. You now have been working a grand understanding of each others businesses. Talk to me about the key distinctions between henderson and janice. What does each firm bring to the table here . Think the first thing to notice, henderson is a terrific, successful name, great relations in the u. K. , europe, had a Good Business in australia. If you look at the footprint of janus, we have done well in the United States, in japan, with the help of a chiles, our friend and partner there. We had a good foothold through an acquisition and australia. If you think about those is the five key markets for organized pools of capital, therefore businesses like ours, each of us was pretty strong at about 2. 5 of those key markets. Together we are strong in all five. Scarlet so you got the map covered. I wonder though, lets stay on the idea of the u. K. Henderson was very strong there, its based there. The new firm as you have been working on this integration, the British Government has from working on brexit as well. Global banks are moving their staff and operations out of london, jpmorgan blindfolded in dublin for instance. Some firms might think twice about building a business in london right now. What are your thoughts on europe now that youve been so involved . I think we live in a world with a lot of change. Brexit was not something i particular foresaw. I dont think its the only potential upset out there. We are looking at our business as positioning itself for the Strong Enough be to withstand surprises and shocks. Certainly brexit is one of them but it doesnt change the fundamental truth that the u. K. And europe were and will continue to be core markets for the Asset Management business, they will be tremendous important. London has been a Global Financial center for hundreds of years. Despite brexit i suspect that will continue for a long time. I agree. Whats happening with brexit we dont know what this will be there will be a lot of ups and downs as we go through negotiations. Were mentioning only about the banks relocating, when you look of financial services, it affects Different Industries differently. The Asset Management industry is the least affected third of the brexit outcome is. Thats because there are already terms such as henderson, no janus already have luxembourg and dublinbased funds we are able to sell through europe. Thats a similar structure that americans but if utilized prior to that. At the moment, we have a business that has got its Fund Managers based in European Countries with brexit happens they will be outside the eu. Their mechanisms we can run to do that. But you . Have a plan b if london continues to lose its stature as a Financial Center of the world at the moment its are 2 two premature to have a plan b. Firstly we dont know the full extent of what a brexit negotiation is. Even if london sees citizens move away to other jurisdictions, ill think london i still think london will be a strong Financial Center on a global scale. Its just the system of the talent pool, infrastructure, professional services such as lawyers and accountants people continue one of the leading Financial Centers. Scarlet i want to talk about this coceo structure you have set up. This was a dutch billed as a merger of equals. Talk but how you plan to make this coceo relationship work. As a temporary, permanent . Is definitely situational, because of the nature we have two very strong as mrs. With great depth of culture and heritage, to bring those together to create a single firm is what we are seeking to do does require both of us to work hard, sit there and make sure that the organization comes as one organization rather than two separate businesses, one centered in denver, one in london. To do that, it requires obviously both of us to work collectively to achieve that. Its not something that the situation i think the board has committed is committed to reviewing situations in the Integration Phase which is up to three years typically. We are both comfortable that that is a decision the board can take. The portal make a decision, we are comfortable in that scenario. Who is going to be in charge of what . Our highest priorities to make sure we bring these two companies and cultures together, create the best new company that we can. Because of that we chose not to divide formally, a responsible is between us. Obviously there will be rules of convenience about the ghost which meetings, well try not to alter the same thing because shareholders deserve to have the greater reach we can have is to ceos. We are being careful about not formerly crating and andrew team, the team, then all of the complexities of those potential competitions, we very much want to avoid that. At the start, we are focused on doing things together. Then i think over time, we will work out whether makes sense to have more differentiation. Initially highest values making sure we bring everybody together in one team rather than create multiples. Scarlet bringing everyone together also allows you to scaleup properly. You can obviously take advantage of economies of scale when it comes to compliance and technology. I wonder if he could talk more specifically about how you plan to utilize the scale to compete against some of your rivals and Asset Management industry. Clearly scale enables you to have better financials, have a better margin, which allows you to also have the returns for your shareholders, also to make more appropriate investments in developing your business. Both of those things are very important. Say, the strongest motivation for this transaction was not scale. It was the complement your nature of our distribution, ill portfolio management, which allows both groups to get better and stronger put together. The third element, we need to be is financially efficient as we can be to fund both returns for investors and appropriate investment. In that area, the scale really helps. Least 110mised at million of synergies. We are well on our way to deliver matt. We think that will provide great opportunity for our shareholders. Scarlet in making sure you cover the globe, you are merging some of the underperforming funds. You are keeping intact, the genus quant division, that has seen outflows because of lagging performance. With quant invest in taking Asset Management by storm, i wonder andrew, how significant a product is this Going Forward . Is something thats a capability, an approach to investing we didnt have that henderson. Janusa real strength brings as part of this merger. I think when you look at this you talking the shortterm flow picture that is been a strong source of growth with janice over the years. Theyve got over 30 year track record. There is good value for that i do think in tech has as quant equity is an alternative to investing. It can be garnered a price points attracted and waited to the. It can also manage the volatile very very well, be able to articulate that well, which is a lot of what people are looking at. Theyre not just looking at returns theyre looking at judged against risk coming text in that regard. Scarlet i wonder what you are going to do too upon performance overall. Specifically, are you looking to . Build that more tech capacity note. The first thing about in tech, their investment process is a volatility cap sure, rebalancing premium capture, a technical set of terms. But basically this all stocks that go up and buy more stocks that have gone down by significant margin. That basic engine can be a slot apply to all industries generate generate outperformance. In the can apply with different risks, parameters, other thing. Nothing the market for that a strong. There approaches strong. They have excellent investment professionals that have been through tough time. Its not for us to go in and try to revive their investment process. We will try to support them, ask intelligent questions, troubleshoot with them, make sure we everything thats humanly possible to be done, communicate well with clients, improve our, invest appropriately. Well try to make sure those things are done but its not for us to change their investment process. Scarlet would you add to that by hiring more people for that division . Tech, theyrk with in will look to develop as they have over their 30 year history, has been a results like any part of her business park, we will give them to them. Whatever of candidates would you be looking to recruit as you integrate your separate businesses . Where would you be hiring . We have a know that complete list unveiled right now. [laughter] what would you say . At the moment given what we have just created, the fact that the merger has just literally completed, were happy with the line up we will have. As new areas, acquired greater investments, or development will do that for now we are pleased with the product product line we have an geographical footprint. Part of your product lineup includes phil gross, the locks Rockstar Fund manager who you brought over from pimco. How big of an asset is someone like bill gross and attracting money coming up with the company is larger and globally more diverse . Probablys terrific, the best fixed income manager of my lifetime. The number one test fixed income manager out there. He has reached a point in his career or he is not looking to run a firmer manage a firmer manager big department. His focus is on leading his product forward, making sure those investors get an excellent risk return result. Well, he isvery attracting positive flows, think that will continue. He also brings intellectual life to the firm, the ability to teach clients about whats happening in the market, macro insights. Is a very valuable or us and our investment teams, also for our clients. He contributes to bowl in a lot of different ways, we are looking to have him. Scarlet forgive me for asking the of his question, lots of people mentioned a few but Velocity Shares in 2013 there be a bill gross etf. How come we havent seen one yet . When you talk with bill about how he wants to allocate his time, he gets to mix and choices at this point. So far he is not decided that thats how he would like to allocate his time. I will support that. Bill, if you are watching, give me a call. [laughter] at this point, we will let bill lead us in terms of how he would like to allocate his time. Scarlet i want to read something that kbws analysts have read about the merger, organic growth will remain remain anemic and nearterm earnings would be noisy. But if you targeted to3 of growth. A study characterization thats fair question mark in the shortterm, the noisy bit about earnings is there. You are taking a u. K. Company not under u. S. Cap into u. S. Cap numbers, you have the fact five monthsy have of the year of the henderson numbers, than the janus numbers joining as part of that. Thek the undertaking of change in accounting standards for half the business, and the fact that businesses have come together halfway through the year creates some of that noise. In terms of anemic growth, thats a characters in the shortterm theres disruption as we bring the firms together. We expect that to pass, particularly now that teens are coming together as one team. Weve done a lot of work around product training. The growth is something we genuinely put this business together because of the strength of brings and distribution. That will lead to longterm value for shareholders, strong Growth Potential the what had abound. Scarlet jpmorgan and bank of america werent Second Quarter training would be down but doubledigit percentages treated blamed low volatility for that. I wonder if you are seeing asset prices hurting or helping her net flows. What does it look like so far this quarter . I cant give you an intraquarter flow update, the securities and Exchange Commission would have a problem with me. Scarlet generally speaking. Generally speaking, good markedly to better flows for our industry. It has been very tough for u. S. Largecap space, its segmentbysegment. I think that will probably continue. Scarlet jeremy, thanks for your time today. Jenna sanderson, coceos take while in danger for micah. Ahead, the Banking Sector is not followed for two markets at record highs we will dive into ticket financial that weakness. From new york, this is bloomberg. Scarlet we are talking before you came on, you talked about Market Action today. Recently is relentless, if i was a good word to describe it, to what do you describe that, considering there have been headwinds . Think theres money flowing in. Whereeople try to look automated trading want runs, a lot of that is problematic line. I think that a lot of the simplest way you can set up a quantitative training strategy is follow trends. The replaceable keep buying it. Theres other strategies selling the rallies, selling the rally has been so unprofitable, so you have the ones following the trend up, those buying tips when they occur. Jury have it. Scarlet one trend or was checking today, how interesting it is that stocks of relative new highs this year, even without financials. We have a chart to illustrate that on the bloomberg, which looks at the snp financials as ratio to the s p 500. Thats the blue here i believe, we have seen a underperform. Then you have one measure of the fiveyearsixmonth spread, one of the Things Holding back the financials. Do think the rally can continue with financials are underperforming . I find perplexing that the market has been able to rally this well without the participation of financials. It has become such a techhave a rally that somehow its been able to ignore it. I was always told, if financials are not rallying or retails are not rallying or autos arent rallying, there is something wrong. When you have for retailers have acted terribly over the last year. Its covered up by amazon. You have automakers acting lackluster over the last few months, covered up by tesla. Theres no amazon or tesla in banking comes theres just the banks there is just the banks. Underperformance and banks is becoming more and more obvious. Scarlet do think thats going to continue . Unless the backdrop gets better for banks materially in the yield curve. See how it happens. I cant see heather making any money the basic lending business with yield curves so flat. They premuch come out and said its tough to make money on the trading side with volatility so low and on the fixed income side with the curve so flat. Iron ore profits come from. Scarlet from an options perspective which strategy do you use to capitalize on that line of thought . Is why the strategy i picked today is putpurchase, a good counter intuitive in this much of a trending upward market. This is again, one way to try to hedge what is potentially the weakest sector in my mind. I have chosen a july 23put. The financials have underperformed over the past few months, they participated in the beginning of the trump rally but they have sowed off cents. The highs have been lower. Lows have been there has been great support at 23. My fear is, if it breaks through 23, you could have a bit of a pullback, this would be your way to play it. Do think there is a side risk given the fed meeting, also the potential for different differences in federal regulations . Is always upside risk in this market right now. I think whats going on here, bringing this around, it would be very easy to say come display local got to leave it there, thanks for joining us. Back to you. Still ahead, we know the us economy added 130,000 barrels in may. What about other aspects . This is bloomberg. Mark its time now for first word news. The Environmental ProtectionAgency Director scott pruitt owes the u. S. Does not anybody any apologies for exiting the paris agreement. Exiting paris does not mean disengagement. The president said yesterday that paris represents a bad deal for this country. It does not mean we will not continue the country. To export our innovation and technology to the rest of the world can demonstrate it how we do it better here is an Important Message to send. Indicated he will either reenter paris or engage in a discussion for a better deal. Mark mr. Pruitt did not say if President Trump feels Climate Change is real or a threat to the United States. Tropical storm beatrice weakened to a low pressure system this morning but continued soaking areas with heavy rain as it moved